Will push for greater transparency in mining cover aboriginals?

Canoes are stacked for the winter as the sun rises Tuesday, December 18, 2012, on the Fort Hope First Nation, Ont., near massive deposits of chromite and nickel known as the Ring of Fire. CP/Ryan Remiorz

The shift towards stronger transparency rules for the mineral industry could one day apply to deals made with Canada’s aboriginal governments, a mining conference heard today.

Though the possibility remains on the far horizon, new rules unveiled by the United States that will force extractive companies to disclose all payments to governments have the potential to apply to First Nation, Metis and Inuit governments which sign economic benefit agreements with firms.

“It is an area of uncertainty,” Kevin O’Callaghan, a partner at Fasken Martineau and co-chair of the firm’s corporate social responsibility law group, said at a Prospectors and Developers Association of Canada (PDAC) seminar Tuesday morning.

If an aboriginal body delivers services to a community, “then arguably, they would get caught in the U.S. definition,” said O’Callaghan. “But that has yet to be determined.”

Toronto is the the centre of Canadian mining this week as the Prospectors & Developers Association of Canada’s annual convention draws tens of thousands to the city’s core. iPolitics is there. For more coverage through the week, click here.

Some aboriginals are governed as bands and administered under the federal government. Aboriginals who signed modern treaties are usually governed by land claim agreements with Canada which often include self-government powers. This has given some First Nations the right to administer health, educational and judicial services, but they require some measure of financial aid from Ottawa on a temporary basis.

Aboriginals have pushed back against efforts by the federal government to get more of their governments to disclose financial data. The First Nation Financial Transparency Act, announced in 2011, is opposed by the Assembly of First Nations.

The upcoming U.S. rule, known as Amendment 1504, will force any extractive company listed on a U.S. exchange to tell the Securities and Exchange Commission (SEC) about every payment it makes to a government in a new regulatory filing. The rule is being held up by a lawsuit launched by the American Petroleum Institute (API).

The SEC regulation is leading international efforts to make extractives more transparent, but the momentum is moving elsewhere too.

“We’re seeing this coming from multiple directions,” said Ben Chalmers, vice-president of sustainable development at the Mining Association of Canada (MAC), during the morning workshop.

Chalmers’ industry group has partnered with PDAC, as well as two NGOs — Publish What You Pay Canada and Revenue Watch — to bring almost identical rules to Canada. The EU also is strengthening its transparency regulations.

Ben Chalmers, vice president of sustainable development at the Mining Association of Canada, speaks at the PDAC convention, Tuesday. iPolitics/Giordano Ciampini

The Canadian working group will target payments made to federal, provincial, municipal and foreign governments. First Nations governments might come under the rules sometime in the future.

“We wanted to not bite off more than we can chew,” said Chalmers.

“If we were to go down the route of extending this out to aboriginal governments, it would require very different set of stakeholders than we have at the table right now,” he said. “Who knows where it will go down the road but we wanted to start with this.”

Canada does not have a central securities regulator, which means a different body will have to be found to administer the new rules.

The group is about 70 per cent done, said Chalmers, and the remaining work revolves around which body will be charged with enforcing the rules.

Liberal MP John McKay — infamous in mining quarters for pushing a bill aimed at corporate accountability for extractives in 2010 — introduced a new private members’ bill last week that would bring rules similar to Amendment 1502 to Canada.

McKay is proposing the reporting mechanism be run by Natural Resources Canada.

The Extractive Industry Transparency Initiative (EITI), a voluntary effort that asks both governments and companies to report on payments, may also cover aboriginal governments.

Though currently in effect, iPolitics could not determine whether any aboriginal governments had their payments covered by EITI by press time. Canada is not a signatory to EITI.